Pfeifer v. KRAUSS CONST. CO. OF VIRGINIA

• Decision Date: 08 June 2001
• Docket Number: Record No. 001615.
• Citation: 262 Va. 262,546 S.E.2d 717
• Parties: Bruce Ray PFEIFER v. KRAUSS CONSTRUCTION COMPANY OF VIRGINIA, INC.
• Court: Virginia Supreme Court

546 S.E.2d 717

262 Va. 262

Bruce Ray PFEIFER v. KRAUSS CONSTRUCTION COMPANY OF VIRGINIA, INC.

Record No. 001615.

Supreme Court of Virginia.

June 8, 2001.

M. Eve Grandis (Robert L. Samuel; Williams, Mullen, Clark & Dobbins, on briefs), Richmond, for appellant.

John S. Norris, Jr. (Kent K. Stanley; Norris & St. Clair, on brief), Virginia Beach, for appellee.

Present CARRICO, C.J., LACY, KEENAN, KOONTZ, KINSER, and LEMONS, JJ., and WHITING, Senior Justice. WHITING, Senior Justice.

This appeal of a personal injury claim involves Code § 65.2-307, the exclusive remedy provision of the Virginia Workers' Compensation Act, Code §§ 65.2-100 through -1310 (the Act), and its applicability to a common-law claim of Bruce Ray Pfeifer, an employee of one subcontractor on a construction job who sued another subcontractor for personal injuries received on the job.¹

The parties stipulated the facts. Linkhorn Bay Associates, L.L.C. (Linkhorn Bay) was the owner of a project known as Linkhorn Bay Condominiums in the City of Virginia Beach. Linkhorn Bay had no employees, and subcontracted all the work to various subcontractors. One such contract was an oral contract with Virginia Natural Gas (the gas company), in which the gas company agreed to dig, install, and test natural gas lines, and to connect them to the condominium buildings on the site at no charge to Linkhorn Bay, in return for Linkhorn Bay's agreement to install appliances using natural gas in the planned condominium units. Linkhorn Bay executed another contact with Pfeifer's common-law employer, Tidewater Applicators, Inc. (Tidewater), in which Tidewater was to "complete `Exterior Finish System for construction' of the Project."

The gas company subcontracted its contractual obligation to Krauss Construction Company of Virginia, Inc. (Krauss). While Krauss' employees were testing the gas line, a plastic gas cap blew off the line, striking and injuring Pfeifer, who was working on the job.

Pfeifer filed a personal injury action against Krauss.² Krauss filed a plea in bar in which it maintained that the court had no jurisdiction to adjudicate Pfeifer's common-law claim because Krauss was Pfeifer's co-employee under the terms of the Act, and therefore his exclusive remedy was under Code § 65.2-300. Pfeifer denied that Krauss was his statutory co-employee and asserted that the exclusive remedy provision of the Act was inapplicable.

After hearing argument, the trial court sustained Krauss' plea. We granted this appeal to Pfeifer.

Because Pfeifer was not Krauss' common-law employee, the controlling statute is Code § 65.2-302. With the names of the parties hereto added in brackets, it provides in relevant part as follows:

§ 65.2-302. Statutory employer.

A. When any person (referred to in this section as "owner") [Linkhorn Bay] undertakes to perform or execute any work which is a part of his trade, business or occupation and contracts with any other person (referred to in this section as "subcontractor") [the gas company] for the execution or performance by or under such subcontractor of the whole or any part of the work undertaken by such owner, the owner shall be liable to pay to any worker employed in the work any compensation under this title which he would have been liable to pay if the worker had been immediately employed by him.

. . . .

C. When the subcontractor [the gas company] in turn contracts with still another person (also referred to as "subcontractor") [Krauss] for the performance or execution by or under such last subcontractor of the whole or any part of the work undertaken by the first subcontractor, then the liability of the owner or contractor shall be the same as the liability imposed by subsections A and B of this section. [Emphasis added.]

Under this statute, even though a third party subcontractor like Krauss may not have a common-law employer-employee relationship with injured workers like Pfeifer, their respective rights and obligations may be affected.

The purpose of [Code § 65.2-302]³ is to bring within the operation of the Act all persons engaged in work that is a part of the trade, business, or occupation of the party who undertakes as owner or who contracts as contractor to perform the work, and to make liable to every employee engaged in the work every such owner contractor, or subcontractor above such employee.

Smith v. Horn, 232 Va. 302, 305, 351 S.E.2d 14, 16 (1986). If the injured worker has a remedy against his statutory employer, that remedy is exclusive under Code § 65.2-307, and the worker has no right to bring a common-law action against any such statutory employer. See Smith, 232 Va. at 306-07,

351 S.E.2d at 16; Anderson v. Thorington Construction Company, Inc., 201 Va. 266, 272, 110 S.E.2d 396, 400-01 (1959),

appeal dismissed,

363 U.S. 719, 80 S.Ct. 1596, 4 L.Ed.2d 1521 (1960).

If a particular subcontractor and an injured employee's common law or statutory employer are both working on the same project and are also engaged in the owner's or general contractor's work, that particular subcontractor, as a statutory co-employee of the injured worker, is also entitled to the common law immunity provided by the exclusivity provision. Evans v. Hook, 239 Va. 127, 131, 387 S.E.2d 777, 779 (1990). Because Krauss contends that it and Tidewater were both subcontractors under Linkhorn Bay, Krauss asserts the immunity of a statutory co-employee here.

On the other hand, if a subcontractor like Krauss had been engaged in work that was not a part of the trade, business, or occupation of the injured party's common law or statutory employer, as Pfeifer asserts, that subcontractor would be "another party" or a "stranger to the employment," and not a statutory co-employee under the provisions of Code § 65.2-302.⁴ Therefore, Krauss would be subject to a common-law action by the injured worker. Evans v. Hook, 239 Va. at 130-31, 387 S.E.2d at 778. Hence, the dispositive issue framed by the parties in this case is whether Krauss' installation of the gas line was a part of the trade, business, or occupation of Linkhorn Bay, making Krauss Pfeifer's statutory co-employee.

First, Pfeifer argues that the gas company was a mere supplier of materials to the job and was not engaged in the trade, business, or occupation of Linkhorn Bay. In support of this position, Pfeifer cites the case of Burroughs v. Walmont, Inc., 210 Va. 98, 168 S.E.2d 107 (1969). In Burroughs, a worker for a sheetrock supplier was injured on a construction job and was permitted to maintain a tort claim against the general contractor. The contract between the supplier and the general contractor required the worker to deliver and stack in each room sufficient quantities of sheetrock to construct the walls in that room. Noting prior cases in which we held that "persons who function solely as suppliers and deliverers of goods" were not within the scope of the Act, we concluded that this was the final act of delivery and not an act of construction. Id. at 100, 168 S.E.2d at 108. Because the injured employee's employer was not engaged in the construction process, the injured employee was permitted to maintain a common-law action against the general contractor. Id.

However, the facts in this case indicate more than a mere sale and final act of delivery. Before the gas company could deliver the natural gas, its oral contract with Linkhorn Bay required it to dig the ditches, install the gas lines,...